I have a friend who has currently bought a new 4BR property using her FHOG as PPOR.
Market rent is about $440 per week. She will be renting out the other 3 rooms.
The boarders will be living there one or two days a week. (however are willing to pay a whole weeks worth of rent to secure that 1-2 days)
One of the boarders needs an invoice for rent so he can claim Living away from home allowance.
What's her best option to take:
1. charge rent by the room and apportion 3/4 of the rent and utility bills + depriciation schedule (is this legal) as a tax deduction. From what I know this should be apportioned to market rent. What are the consequences of not renting it out for market rent?
2. Do not rent out until after 6 months when FHOG is finished. Charge rent and invoice all boarders and claim appropriate tax deductions. This way the place is still initially a PPOR and should it be sold in the future would be exempt from CGT.
Market rent is about $440 per week. She will be renting out the other 3 rooms.
The boarders will be living there one or two days a week. (however are willing to pay a whole weeks worth of rent to secure that 1-2 days)
One of the boarders needs an invoice for rent so he can claim Living away from home allowance.
What's her best option to take:
1. charge rent by the room and apportion 3/4 of the rent and utility bills + depriciation schedule (is this legal) as a tax deduction. From what I know this should be apportioned to market rent. What are the consequences of not renting it out for market rent?
2. Do not rent out until after 6 months when FHOG is finished. Charge rent and invoice all boarders and claim appropriate tax deductions. This way the place is still initially a PPOR and should it be sold in the future would be exempt from CGT.